Municipals continue firming trend; State of Georgia to sell $700 million in G.O. bonds Monday

By Sheri Kasprzak

New York, Nov. 20 - The municipal yield curve saw some strength on Friday ahead of a week shortened by the Thanksgiving holiday. Yields on the short end of the curve were seen better by 2 to 3 basis points while the longer end was seen mostly flat.

"It was actually pretty good for a Friday," one trader said.

"We're seeing a lot of firmness, especially on the short side. There's some trading action going on out there. Not a huge amount, but some stuff is moving."

Amid that secondary activity was the California State Public Works Board's recently priced series 2009I capital projects bonds. The 6.375% 2034 bonds were seen at par. The 5% 2018s were seen at 4.93%, and the 4% 2012s were seen at 2.65%.

The trader reached Friday afternoon said he feels the secondary market will still see some interest, even though most people will be distracted by their turkeys and football games.

"The early part of the week should be pretty active," he said.

"It won't be a normal week in terms of volume, but since there's not much new issue stuff out there, there should be some decent demand for secondary. The latter part of the week is going to be dead, without a doubt."

Georgia sale planned

Looking to the coming week's light primary activity, the State of Georgia is scheduled on Monday to bring to market $700 million in series 2009 general obligation bonds, said a preliminary official statement.

The sale includes $85.48 million in series 2009F G.O. bonds, $114.52 million in series 2009G G.O. bonds, $400 million in series 2009H Build America Bonds and $100 million in series 2009I G.O. refunding bonds.

The bonds will be sold on a negotiated basis with Goldman, Sachs & Co. as the senior manager.

The 2009F bonds are due 2010 to 2014, and the 2009G bonds are due 2010 to 2029. The 2009H bonds are due 2010 to 2029. The 2009I bonds are due 2010 to 2023.

Proceeds will be used to fund water and sewage facilities as well as school facilities.

Mobile bonds scheduled

Also coming up on Monday, Mobile, Ala., plans to sell $78.299 million in series 2009 G.O. warrants through senior manager Morgan Keegan & Co. Inc.

The sale includes $55.175 million in series 2009A G.O. refunding warrants, $16.69 million in series 2009B G.O. Build America warrants and $6.434 million in series 2009C G.O. recovery zone economic development warrants.

Proceeds will be used to finance capital obligations and refund existing debts.

On Tuesday, the Royal Oak Hospital Authority of Michigan is set to sell $272.625 million in series 2009W hospital revenue and refunding bonds (A1//A-) for William Beaumont Hospital through Morgan Stanley & Co. Inc.

Proceeds will refund the hospital's series 2001 and 2003 auction-rate securities and provide capital for improvements.

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